UNET Seminar: Larry Samuelson (Yale University)

This is an in-person event

Title:  Delegated bidding

Abstract:  We study an interaction in which principals must hire agents to bid in an auction. The agents can exert unobserved and costly effort to collect information about the value of the object. The optimal  remuneration scheme must induce the agents to exert effort and then appropriately condition their bids on their information. The principals thus face a competing-mechanisms problem with interdependence valuations among the agents. We identify conditions under which the principals’ mechanism choice game has a pure equilibrium. We characterize the distortions induced in the agents’ bidding schemes by the principals’ efforts to reduce the agents’ rents, and characterize circumstances under which these distortions induce overbidding.